Today, the Federal Reserve System can contract the money supply by
(a) increasing the discount rate.
(b) increasing reserve requirements.
(c) selling U.S. Treasury and federal agency securities.
(d) engaging in all of the above.
(d)
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If a firm's MPK is below its user cost of capital, it is employing too ________ capital and its profit is ________ in the long run
A) little, above what it will be B) little, below what it could be C) much, above what it will be D) much, below what it could be
Other things being equal, a price-discriminating firm will charge less to the customers who
A) have the lowest incomes. B) have the least elastic demand for its product. C) have the most elastic demand for the product. D) are the most rational in making their decisions.
What is "crowding out"? Why is it important in discussions of fiscal policy? Use an appropriate diagram to illustrate your answer
According to the Taylor rule, if the target rate of inflation for the Fed is two percent and real GDP rises by one percent above potential GDP, then the Fed should:
A. Raise the real federal funds rate by one percentage point B. Lower the real federal funds rate by one percentage point C. Raise the real federal funds rate by half of a percentage point D. Lower the real federal funds rate by half of a percentage point